2.3 Housing wealth as an influence on life chances
As you read the following text notice how life chances are affected by whether you are a home owner or a tenant in rented accommodation. Why are life chances different for these two groups?
Does it matter whether you rent or own your home?
Saunders (1988) argued that housing tenure (whether your home is owned or rented) has become more important than occupation (type of job) in terms of affecting people’s life chances. According to this argument, owner-occupied housing (housing which is owned, or is being purchased with a mortgage, by the people who live in it) represents a source of wealth accumulation which enables people to buy things through the private market (such as health care and education) rather than relying on that provided by the state via taxation. This, it is argued, can be achieved by withdrawing money from housing in the form of equity (the difference between the value of the house and the amount of mortgage remaining on it), and also gaining access to cheaper credit as a result of being a home owner (Saunders, 1988, 1990). Furthermore, passing on wealth through inheritance means that this advantage is passed on from generation to generation.
Tenants, in contrast, represent a distinct group without access to such resources. Saunders argued that because housing tenure affects the way that people are able to gain access to wealth and services, it has become the most important source of division in society, outweighing the importance of occupation as an influence on life chances.
Other social scientists have argued that Saunders overstated the importance of housing tenure. Watt (1993), for example, argued that not enough consideration had been given to the impact of people’s ability to withdraw equity from their properties. If you withdraw equity, in other words get cash to pay for things by enlarging your mortgage, then this would reduce how much your children could inherit. Also, people often have to sell property in later life to pay for residential or nursing care. If that happens then the advantages of home ownership are further reduced. Forrest and Murie (1995) also pointed out that all owner-occupied housing is not alike, and that the quality and value of houses vary enormously. The implications of this are that home ownership in itself may not be the primary factor affecting opportunities in life. Rather, it is people’s level of income which is still the main factor which influences life chances.
The three previous paragraphs demonstrate one of the key things that social scientists (and other academics and students) do when they write for an academic audience, which is to propose an argument, or debate. The first two paragraphs give an overview of Saunders’ argument, and describe the details of the argument and reasons for the assertion. The third paragraph outlines a counter-argument which suggests that Saunders is not right and cites evidence (including some from other social scientists) to support this. Thus a debate is being developed and evidence is used to support the points being made.
While Saunders’ argument about housing tenure has some merits, it does not seem to present the whole picture, as those who have criticised him suggest. At present, most people still rely on their incomes in order to obtain mortgages, and those with smaller incomes who are likely to struggle to afford to buy a property are also more likely to need to release equity later in life in order to boost a small retirement income. On the other hand, those who have greater incomes from employment are likely to be able to afford bigger houses. They are less likely to need to withdraw equity from their property and therefore more likely to pass on inheritance to their children. They might even provide financial assistance to help their children obtain mortgages themselves. Thus, it is possible to argue that owning or buying a property rather than renting brings more choice and possibly wealth for only some people – those who are already affluent. Overall, housing tenure could be said to worsen existing inequalities relating to income from employment.
Returning now to the issue of housing wealth, think back to the article in Activity 2 which illustrated the way that housing wealth is likely to influence the lives of the Confino family. The Confinos’ house is probably owner-occupied and, given its size, it is likely to be worth a good deal. It will probably provide an inheritance for the children in the future, which will help them in their lives. Furthermore, it provides the family with choice over where they live. If they wish to move, they can sell the house and buy another one of similar or greater value as their incomes rise with age and they accumulate wealth in their housing in the form of equity.
In contrast, Debbie has very little control over her life and cannot easily move. Housing-association and local-authority housing is not easy to obtain in many areas (especially in London) due to the high demand. Availability further declined as a result of the sale of council houses following the 1980 Housing Act, which gave tenants the right to buy their properties at considerable discounts. Those properties sold tended to be in towns and more rural areas rather than inner-city areas and also tended to be houses rather than flats (Malpass and Murie, 1999). While new properties have been built for renting from housing associations since then, overall the stock has severely diminished, and what remains is often in deprived, inner-city areas. Debbie could request a transfer to another housing-association property but she would probably have to wait a long time for it to happen, if it did at all. The Brett children will not inherit capital. Thus (notice the concluding word ‘thus’, which is being used to conclude the discussion), housing influences the quality of people’s everyday lives, their life chances and the life chances of their children.
This section has given you the opportunity to think about what you can possibly learn about wider society by starting with a comparison of just two families. Drawing wider understanding from detailed observation and the use of concepts, is at the heart of social science. Your work on this and the previous week will have put you in a good position to move onto the Week 5 quiz.